Liberal Fascism

John Edwards, TR, & Big Meat

A quick point I’ve wanted to make since Saturday night’s Democratic debate. I have a whole chapter in the book on fascist economics which attempts to do two things: A) demonstrate that most of what passes for common knowledge of fascist economics is nonsense. Big business didn’t finance Hitler, Hitler wasn’t a capitalist, etc. And, B) show how much of the liberal regulatory stuff we get — from Democrats and Republicans alike — actually produces the sort of corporatist economics liberals tend to call fascist. Businesses tend to get in bed with government when government tries to get in bed with business. Tim Carney’s book, The Big Rip Off, is really a wonderful resource for the lay reader who wants a non-academic but lucid demonstration of this.

Anyway, the other night John Edwards said:

I want to say just — I want to say a quick word about this. You know, it is true that these entrenched interests — whether you’re talking about oil companies, drug companies, gas companies, whoever — these entrenched interests are literally stealing our children’s future. They have a stranglehold on this democracy and they are having an incredibly destructive force on the middle class, on families being able to do what my family has done and so many who are sitting here have been able to do.

And the problem is you can’t be with those people, take their money and then challenge them. It doesn’t work. You have to be willing to actually stand up and say no — no to lobbyist money, no to PAC money, no corporate lobbyists working for me in the White House. If you intend to take them on, and if it is personal for you — and this is extraordinarily personal for me — if it’s personal for you, then you can be successful bringing about the change.

Teddy Roosevelt — just one quick example — Teddy Roosevelt — Teddy Roosevelt, a great American president — he didn’t make deals with the monopolies and the trusts. Teddy Roosevelt took them on, busted the monopolies, busted the trusts. That’s what it’s going to take.

The trouble with this is that it’s not right. Teddy Roosevelt did make deals with monopolies and trusts, as did his cousin Franklin Delano. The New Deal was a huge giveaway to corporate interests and associations. Anyway, regarding T.R. (there’s way too much to post regarding FDR),  I have this on pages 291-292

Since the dawn of the Progressive Era, reformers have constructed an army of straw men, conjured a maelstrom of myths, to justify blurring the lines between business and government. According to civics textbooks, Upton Sinclair and his fellow muckrakers unleashed populist rage against the cruel excesses of the meatpacking industry, and as a result Teddy Roosevelt and his fellow Progressives boldly reined in an industry run amok. The same story repeats itself for the accomplishments of other muckrakers, including the pro-Mussolini icons Ida Tarbell and Lincoln Steffens. This narrative lives on as generations of journalism students dream of exposing corporate malfeasance and prompting government-imposed “reform.”

The problem is that it’s totally untrue, a fact Sinclair freely acknowledged.“The Federal inspection of meat was, historically, established at the packers’ request,” Sinclair wrote in 1906. “It is maintained and paid for by the people of the United States for the benefit of the packers.” The historian Gabriel Kolko concurs: “The reality of the matter, of course, is that the big packers were warm friends of regulation, especially when it primarily affected their innumerable small competitors.” A spokesman for “Big Meat” (as we might call it today) told Congress, “We are now and have always been in favor of the extension of the inspection, also to the adoption of the sanitary regulations that will insure the very best possible conditions.” The meatpacking conglomerates knew that federal inspection would become a marketing tool for their products and, eventually, a minimum standard. Small firms and butchers who’d earned the trust of consumers would be forced to endure onerous compliance costs, while large firms not only could absorb the costs more easily but would be able to claim their products were superior to uncertified meats.

This story plays itself out again and again during the Progressive Era. The infamous steel industry—heirs to the nineteenth-century robber barons—embraced government intervention on a massive scale. The familiar fairy tale is that the government stepped in to control predatory monopolies. The truth is almost exactly the opposite. The big steel firms were terrified that free competition would undermine their predatory monopolies, so they asked the government

to intervene and the government happily obliged. U.S. Steel, which was the product of 138 merged steel firms, was stunned to seeits profits decline in the face of stiff competition. In response, the chairman of U.S. Steel, Judge Elbert Gary, convened a meeting of

leading steel companies at the Waldorf-Astoria in 1907 with the aim of forming a “gentlemen’s agreement” to fix prices. Representatives of Teddy Roosevelt’s Justice Department attended the meetings. Nonetheless, the agreements didn’t work, as some firms couldn’t be

trusted not to undersell others. “Having failed in the realm of economics,” Kolko observes, “the efforts of the United States Steel group were to be shifted to politics.” By 1909 the steel tycoon Andrew Carnegie was writing in the New York Times in favor of “Government control” of the steel industry. In June 1911 Judge Gary told Congress, “I believe we must come to enforced publicity [socialization] and government control . . . even as to prices.” The Democrats — still clinging to classical liberal notions—rejected the proposal as “semi-socialistic.”


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